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Memphis Tennessee Bankruptcy Blog

Bankruptcy can be good for your health

You might find it strange to say that bankruptcy can be good for your health. If bankruptcy places such a stigma on the person filing for it, why would it be good for your health? The answer is because many Tennessee residents who fear going bankrupt will do anything to make payments on their debt, including diverting money from buying food and medicine. However, doing so may only delay your inevitable need to file bankruptcy and also damage your health in the process.

Nerdwallet chronicled in a recent article that some people will not pay for essentials just to avoid filing for bankruptcy. The article cites a study from Notre Dame Law Review that found 32 percent of people who delayed filing for bankruptcy went without food during that time period. The survey also found that as many as 60 percent of people putting off bankruptcy elected not to get medical treatment.

What happens when you are unable to make Chapter 13 payments?

Chapter 13 bankruptcy could be a powerful tool to restructure and limit the long-term impact of your debts. It could, in many cases, reduce financial risks, namely by limiting your creditors' rights to repossess the property you have offered them as collateral. Even though most Tennessee Chapter 13 bankruptcies proceed without incident, some debtors encounter problems keeping up with payments.

There are a number of reasons you might find yourself struggling to make your Chapter 13 installment deadlines. Some would be due to factors outside of your control, while others you could easily avoid — this article looks briefly at one example of each. Regardless of the cause of your missed payment, the consequence would likely be that your creditors would attempt to dismiss your bankruptcy case.

When could chapter 7 be good idea?

Chapter 7 is a form of bankruptcy that would involve liquidating your assets in order to obtain debt forgiveness. If you could qualify for it, and if you were under significant financial strain, it could be worth your time to look at the long-term results of choosing this strategy. 

This type of debt relief is not suited to every situation. Putting aside for the moment the fact that you would have to satisfy certain criteria before you could file a potentially successful chapter 7 bankruptcy in Tennessee, this article looks at whether you could benefit from liquidation.

Understanding the Fair Debt Collection Practices Act

If you are a Tennessee resident facing overwhelming debt, you probably feel like you are being harassed to death by constant phone calls from all your creditors insisting that you pay their debts immediately. However, the Fair Debt Collection Practices Act forbids your third-party creditors from harassing you.

Be aware that third-party creditors are not those to whom you directly owe money. Instead they are the companies, generally debt collection agencies, that bought your debts from your respective creditors when you fell behind in your payments or stopped paying those creditors entirely.

Famous financial troubles past and present

There are plenty of stories of people who filed for bankruptcy, only to bounce back later to greater success. For many, the process is an opportunity to gain insight into debt management strategies and plan for the future. In fact, some famous Tennessee figures are currently facing financial challenges.

There are entertainment magnates, genius inventors and even United States presidents on the list of successful people who have declared bankruptcy. However, these people were not superhuman. Rather, debt forgiveness gave them the chance to continue and refine their visions — just as it does for people today.

Helping our community thrive

At Jimmy E. McElroy & Associates, we are proud of the work we do — and we like to think of it as more than just helping people file for bankruptcy. Just like our clients, we are members of the community we serve. Our primary goal is to help our Tennessee neighbors who might have overextended their finances to get back on their feet and back to pursuing their dreams. 

Many of our clients come into our offices for the first time with the idea that they are taking a last-resort option. While we realize that bankruptcy is nobody's first choice, we also know that it is nothing for you to feel bad about. In fact, if you were to have financial trouble and qualify for chapter 7 or chapter 13, we would probably recommend that you take the opportunity to have a small celebration.

Chapter 13 filers should beware predatory lenders

Many people who file Chapter 13 bankruptcy fear they will not be able to successfully apply for a loan, or that they will only find lenders that require such high fees that it is not feasible to apply for financing. So when bankruptcy filers find a Tennessee lender who is not interested in their past credit history, it seems like they have found the answer to their problems. However, a lender who does not ask you about your past debt history may actually be bad news.

Reputable financial lenders want to examine a person’s previous credit history to determine if that person has a good chance to repay that debt. Nerdwallet warns that a lender who is not interested in your history of paying debts might be a predatory lender. Predatory lenders are malicious actors who know that there are people out there trying to recover from bankruptcy and will offer enticing deals to draw people in.

How can I stop a utility company from turning the lights off?

One option you might have to stop electricity, gas and water companies from discontinuing your service is to file for bankruptcy. This could give you a type of protection that is similar in concept to the automatic stay: the part of bankruptcy that could have the power to stop creditors from harassing you.

While automatic stays are related, utilities are not subject to the same rules as general lenders. The laws that govern your relationship with your utility company are contained in a different section of the bankruptcy code. Once you understand the difference, it is often easier to form a strategy that lets you keep the lights on. 

Can I keep my car if I file for bankruptcy?

When you fall behind on your payments and your finances start to crumble, you may think about filing for bankruptcy.

Declaring bankruptcy is an effective way to wipe out or create affordable payment plans for the following:

  • Credit card debt
  • Outstanding medical bills
  • Personal loans

Differences between personal and business bankruptcy

The recent decision involving national toy retailer Toys 'R' Us which led to a widespread store closure has generated some interest in the media about the bankruptcy process. As an individual facing bankruptcy in Tennessee, this could lead to confusion and even misinformation. 

One main issue is that individuals and sole proprietors do not often use the same type of bankruptcy as do corporations or business partnerships. There are various factors that could go into the decision of which chapter under which an entity should file, including the eligibility of the applicant, relative simplicity of some options and post-decision goals of the individual or business filing for bankruptcy. 

*We are a debt relief agency.
We help people file for bankruptcy relief under the Bankruptcy Code.